FX.co ★ The USD/JPY technical analysis and trading recommendations for December 10, 2010

4-hour timeframe

Overview:
New buy signal with the target to 86.19 has formed for the yen. This signal is strong and confirmed, as the Chinkou Span has fixed above the price char and the price has fixed above the Ishimoku cloud. In this case the current target for uprising movement is the first resistance level of 85.08, and it is recommended to start trading only after the MACD reverses up, which will indicate the resumption of uptrend. If this level is passed the next target will be the second resistance level of 85.73. The upside movement remains until the price is above the Kijun-Sen (83.30), if the price fixates below this line then long positions should be closed. The Chinkou Span is above the price chart, which denotes the bullish sentiment, as well as confirms the buy signal. The Bollinger bands show the uprising motion, the lines are slightly converging and directed up, which points to the current correction. The MACD is descending, thus indicating the current correction movement, which will end after the MACD reverses upside.

Trading recommendations:
Currently it is recommended to wait until the MACD reverses upside and after to trade up with the first target to 85.08. Stop Loss is placed below the Kijun-Sen (83.30).

In addition to technical image, one should take into account the fundamental data and the time of their release.

The chart annotation:
Ishimoku indicator:
Tenkan-sen — red line
Kijun-Sen — blue line
Senkou Span A — light brown stipple line
Senkou Span B — light purple stipple line
Chinkou Span — green line
Bollinger Bands indicator:
3 yellow lines
MACD indicator:
The red line and the histogram with the white bars in the indicators window.